News

Dollar Tree to buy Family Dollar for $8.5 billion

Dollar Tree to buy Family Dollar for $8.5 billion

Customers walk past a Family Dollar store at Hickory Grove Market in Charlotte, N.C. Photo: Associated Press/Ross Taylor, File

(Reuters) – Discount store chain Dollar Tree Inc offered to buy rival Family Dollar Stores Inc for about $8.5 billion, in a deal the companies said would create North America’s leading discount retailer.

Dollar Tree’s offer of $74.50 per share in cash and stock represents a premium of about 23 percent over Family Dollar’s close of $60.66 on Friday. Family Dollar had about 114 million shares outstanding as of July 5.

Shares of Family Dollar, which has been under pressure from activist investor Carl Icahn to sell itself, rose about 21 percent to $74.00 in premarket trading on Monday.

Dollar Tree shares were up 4.2 percent at $56.50.

Family Dollar shareholders will get $59.60 in cash and $14.90 in stock for each share they hold.

Family Dollar caters to lower-income shoppers, many living paycheck to paycheck, while Dollar Tree mostly targets the middle class.

Icahn, Family Dollar’s largest shareholder with a 9.4 percent stake, wanted the company to sell itself to Dollar General Corp to help it cope with stiff competition from big-box retailers such as Wal-Mart Stores Inc .

J.P. Morgan Securities LLC is financial adviser to Dollar Tree, and Morgan Stanley & Co. LLC is financial adviser to Family Dollar.

(Reporting by Ramkumar Iyer and Devika Krishna Kumar in Bangalore; Editing by Savio D’Souza)

Recent Headlines

in Entertainment

See what’s new on Netflix this month

17-overlay6

Are you over fireworks and cookouts? Stay inside and binge on these movies and shows that are now showing on Netflix.

in Entertainment, Sports

Mayweather, Pacquiao, Perry among the ‘best paid’ celebrities

maypac

Musicians and athletes dominate the world's highest-paid celebs, according to the latest rankings.

in Entertainment, National

Celebrate safely with these fireworks tips

Since Independence Day falls during the work week, members of St. Richard Catholic Church celebrated the holiday on Sunday, June 30, 2013, with a picnic-style outing complete with fireworks that could be seen throughout the northeast Jackson, Miss. neighborhood. The long streamers were recorded in a 13-second time exposure. (AP Photo/Rogelio V. Solis)

Don't be one of the thousands of Americans injured by fireworks on July Fourth. Stay safe and have a happy holiday!

in National, Viral Videos

WATCH: The origin of fireworks

17-overlay

The history behind the July Fourth firecrackers that mark our Independence Day celebrations.

in Viral Videos

Miami judge recognizes suspect as middle school classmate

20-overlay

A man charged with burglary is moved to tears when he realizes he went to middle school with the judge assigned to his case.